{Happy Team Members Make Happy Customers }

In one of my early projects in the corporate world, I built a team member satisfaction measuring tool for the company I was working for. As I built the questionnaire, I covered all areas from hiring to training, from on the job satisfaction to the role of the supervisor and compensation.  

Once the data was collected and broken down by region, I tried to correlate it to sales for each region but to my amazement, there was very low correlation. That seemed quite strange. Certain Senior Management members started questioning the need for the survey as it was not connected to the top-line key performance indicators of the brand. The reports generated on the project made their rounds among different regional VPs and then got put in their designated folders. I was quite bummed for not being able to provide the company with actionable data, or making the company feel that they can act based on the data.

Six months later, when I was between projects, I decided to run the correlations again. But this time I used current sales and compared it to team member satisfaction data collected six months back.  The results were simply astounding. The relationship was strong. Then I enhanced the model by putting monthly sales changes for the last six months and soon realized that the team member satisfaction data was a crystal ball, as it was the leading indicator of future sales.

I could not believe I missed this one. This was right in front of my eyes and I failed to see it. I remember growing up in India; my mother was a great cook. But on days she was upset, the food was not the same.  Of course my brother and I never complained, not because we did not want to complain, but complaints got us a few smacks on the head. In short, my mom, a great cook, could not cook to her full potential on days she was unhappy. So in order to get a great meal, our job was to make sure mom was happy, at least when she cooked.

That same lesson now was in front of me, on a bigger scale. I realized that only happy team members can make customers happy. Empowered by the new information, the team member satisfaction data found a new life in the corporation. As most of you can imagine, in the corporate world we judge today on yesterday’s sales, a trailing indicator. In that scenario, to be able to provide a system-wide and regional level leading indicator for sales is very valuable.

At the same I came across another piece of information. In most experience industries, nearly 70% of the reason for revisit (repeat sales) was the customer’s experience. The remaining 30% was marketing, branding, message and other factors.  And who controls the customer’s experience? The front line team members. Wow!  I realized we had information that would allow us to favorably influence the guest experience.

The next few months, I traveled to present the data to each region and would also do focus groups with team members to understand the drivers of the data.  Here are my top three big learnings:

1.   It is better not to ask what is wrong, than to ask and not do anything about it. 

Asking sets an expectation, and not doing anything creates an unfulfilled promise.  It is just like a relationship where earlier your spouse accused you of not asking him/her of how the day was.  Now that you asked and he/she is talking, you are accused of not listening (and not caring) as you were doing something else at the time.

Solution:  Within three months of collecting team member satisfaction data, all team members should receive the following:

a)      Top-line summary data so they feel included

b)      List of actions that will be taken

2.   Compensation is not the number #1 driver of satisfaction.

Of course fair compensation is necessary, and fair is defined by:

a)      comparable industry salaries

b)      salaries within the company

c)       incentives that reward performance

But what was more important on a day to day level was work place situations and interactions.

3.   Finally, team members worked for a person, not a company.

The data always has a strong correlation with how a supervisor treats a team member.  Hence when a team member decides to leave a company driven by dissatisfaction, the primary source of dissatisfaction is “how my boss treats me on a day to day basis.”

{Toy Story 2009: Where will America buy toys this holiday season?}

Let us take a stroll back in time to see how America has bought toys during the holidays in years past.

In the 1990s, Toy R Us was the category leader. The holiday toy sales started the weekend of Thanksgiving, with Toys R Us newspaper insert, in which America learned about the coolest toys of the year. Also in the newspaper insert was coupons for the hottest priced toys of the season. America used to wait in anticipation for the insert and then rush to Toys R Us. Toys for holidays was synonymous with Toys R Us. They were the information leader, the price leader and the “place to go” for toys.

In 1998 the toy industry had its first major shakeup. Internet was becoming more mainstream and America did not need Toys R Us to know what were the coolest toys of the year. Americans also did not need to wait till Thanksgiving to learn about the coolest toys of the year. And WalMart did the unthinkable.

WalMart realized that if toys can become a commodity, then the price leader will be the category leader. WalMart also realized the 80-20 rule, where 80% of the sales comes from 20% of the toys. In 1998, WalMart decided to extend its toy selection to carry top selling toys and discounted them right after Halloween, nearly four weeks before Toys R Us started their thanksgiving promotion. And when Thanksgiving 1998 came, a sizable part of the population had already purchased their toys. Toys R Us was ambushed.

At the same time, in order to grow the category, Toys R Us had launched Kids R Us and Babies R Us. Kids R Us eventually went out of business. Babies R Us still exists. But instead of trying to create three brands, Toys R Us should have focused on answering the question “Why Toys R Us?”

- Do you get toys that are exclusive to Toys R Us?

- Do you get toys released at Toys R Us before they are available anywhere else?

- Is the toy buying experience totally out of the world that kid must go there and no where else?

If it is none of the above, then a toy is a toy and buyers had no hesitation to go to the closest and cheapest retailer of toys. And WalMart had everything to gain as buyers went this direction. Another gainer from this has been the online retailers. For toy occasions that do not need an instant gratification, they started to become the best option.

In 2008, the toy war has gone to the next level. WalMart Announced in October its 100 Toys For Just $10 sales. Based on WalMart’s internal research, “70 percent of consumers report planning to start their holiday toy shopping before Halloween, and 2 out of 10 will have finished by that time,” (WalMartStores.com)  Toys R Us responded by “setting up 350 temporary stores and toy boutiques that will stay open during the holiday season, in many cases taking over shuttered retail space in shopping malls” (Wall Street Journal).  But what does this strategy mean? Is Toys R Us conceding the price war to the buying power of WalMart? Is Toys R Us trying to outplay WalMart by being the most conveniently located toy retailer? Even Toys R Us succeeds in becoming the most conveniently located toy retailer, they have to watch their marginal returns, taking into account the costs for the new 350 temporary locations. They also have to worry about branding. Will these new temporary locations be branded the same way as their regular stores or look like nameless pre-halloween retailers who pop up every year. If Toys R Us takes their eye of the branding, five to ten years from now, we will be telling our next generation about the magical toys store, with a cute giraffe as their icon, a magic land that simply became extinct.

{Brent Green on Boomers and the Future of Luxury Brands}

While having coffee with one of my colleagues one afternoon, I asked for his views of the future of luxury brands and Baby Boomers. “Luxury brands are dead,” he said, pointedly.

I was taken aback by this cryptic pronouncement. Probing further I asked him to reconsider such a pessimistic position. Entire companies and industries depend on middle- and upper-middle class Baby Boomers pursuing occasional luxury splurges, whether diamond earrings or day-spa packages at a Mobil Five-Star hotel.
He nevertheless remained resolute. An unprecedented economic recession had swept a pall of fear and frugality across the nation, and for this generation, it was here to stay.

In an Adweek article entitled, “Boomers Caught in Squeeze Play,” which assessed Boomer consumerism in difficult economic times, the future does indeed appear bleaker. Eric Almquist, a Bain & Co. partner, observed that a very large group of pre-retirement Boomers are entering a life stage of traditional economic parsimony.

The current Boomer mindset revolves around a nearly universal question: “Can I live off my savings and social security for the rest of my life?” This gnawing question leads to greater risk aversion, obsessive price shopping, and an urge to preserve equilibrium in the current life situation.

Ben Kline with the Leo Burnett agency in Chicago believes that consumers were not just cutting back on spending; they’re reassessing what is important.

Also commenting for Adweek, Kline said, “We’re seeing shift from a trade-up culture to a trade-off culture.” Kline believes that Boomers view discretionary purchases from a newly emerging framework. They are seeking more than value, where a product’s bundle of tangible and intangible attributes reach an optimum balance with price.

According to Kline, consumers are undertaking something akin to brand triage, where they assess discretionary purchases as either indispensable or dispensable, based on more deeply held core values.
David Wolfe, co-author of Ageless Marketing and Firms of Endearment, insists this behavior is being driven by more than distressed economic times. In an email to me and a few colleagues, David wrote:
“The spirit of materialism wells up in youthhood to incline behavior toward outwardly visible messages to others. It takes different forms in different cultures, from body markings and piercings to outlandish clothing and other eye-popping possessions acquired with the intention of increasing one's influence, power and wealth.”

Wolfe insists that thriftiness in middle-age is not just a byproduct of lifestage; rather, middle-aged adults seek new priorities, driven at the root by fundamentals of human development.

“For most, the onset of midlife is accompanied by an ebbing of narcissism and materialistic appetites because the social and vocational aspirations have typically become trimmed. Now, people begin talking about ‘simplifying’ their lives and putting their lives in balance. All in all these shifts are less rooted in volition than in our genes which anticipate the milestones of personality development. The zeitgeist (reflects) a shift away from narcissistic and materialistic values.”

There you have it. Today’s luxury industries are confronting convergence of two forceful trends: Boomers entering a lifestage when traditional materialistic values become less important, plus a recessionary economy that for many has decimated idealism around retirement.

So I return to the question I asked my colleague, “What is the future for luxury products?”

I believe well-run companies producing products of true quality and uniqueness will not confront inevitable dissolution. Badly run companies will tumble in an unforgiving economy. However, the rules for marketing luxury products must change, and those failing to adapt branding and advertising strategies will suffer grave consequences.

In a recent interview with Women’s Wear Daily concerning the future of discounting, I provided reporter Valerie Seckler with a hopeful analogy using my recent purchase of a luxury white button-down dress shirt at Nordstrom’s.

First, I shopped for a white shirt, as opposed to some other color or stripe, because a difficult economic climate has been influencing men to return to white shirts as an outward statement of prudence and pure business focus. This trend was recently covered by CBS newsmagazine, 60 Minutes.

Second, I knew I could walk across the mall to Macy’s and find white dress shirts on sale for more than half the price of the Nordstrom’s product. But I justified paying double, not because I’m feeling flush but because I know their products and legendary reputation for customer focus.

Third, from experience I know the Nordstrom’s brand shirt will look new and unwrinkled even after 50 washings. When I unpack in a hotel room, the shirt will barely need touch-up with an iron before wearing, and as I wear it all day, it will maintain a crisp appearance. Should the shirt ever show a defect, such as a splitting seam, Nordstrom’s will replace it without hesitation.

This is the future of luxury brands: not just value but core values; not just low prices but product longevity; and not just surface bling but deep customer connection.

Accordingly, here are a few strategies my firm has been recommending to purveyors of luxury products:

Build communities around your products. The legendary Harley-Davidson has always commanded higher prices than foreign motorcycles partly because of HOG (Harley Owners Group), a network providing powerful referential reinforcement.

Differentiate with values that address emerging Boomer needs to seek higher purpose in lifestyle choices. A watch is more than a watch when acquired as a future heirloom for a grandchild. This understanding has been among implied underpinnings in marketing of luxury watches for Swiss manufacturers such as Breitling.

Make an unassailable quality and durability case. Most Boomers have been burned many times by shoddy products that seemed like a good deal but then break shortly after purchase. Boomers generally believe the adage: You get what you pay for.

Consider tiered pricing. Just as airlines such as Frontier are unveiling tiered ticket prices in coach class, luxury class products can be offered to consumers as good, better and best (not cheap, cheaper, cheapest), without compromising upscale brand stature or differentiation.

Strategic Implications: These are but a few of the strategies my company has been helping clients implement. Many opportunities exist to convert luxury into longevity and superb into sustainability — core values Boomers seek today with their discretionary dollars. And don’t be misled. Boomers still have billions of discretionary dollars to spend yearly, even following one of the deepest recessions since the Great Depression. By far they have greater economic clout than any other generational cohort, so to eschew this market would be economic suicide.

{Lane Cardwell on Brand Turnarounds}

I am honored to be the first guest blogger on Arjun’s blog. I don’t need to know that others were asked before me and turned down the opportunity. I seized the chance to tell my tale of the turnaround of a brand; or least the beginnings of a turnaround. By definition, a turnaround has to end in success, or it is merely a brand that is still in trouble moving in a different direction than it was previously moving.

There are some glorious turnaround stories in the retail and restaurant industry, but contrary to public perception, there are not a lot of these stories. Target was a turnaround, moving from me-too to gee-whiz. Olive Garden was a turnaround, moving from bada-bing, to bada-boom. In fact, the architect of that turnaround, Brad Blum, is trying his hand at turning around the chain that caused Olive Garden to need a turnaround: Romano’s Macaroni Grill. Even in the restaurant industry there is poetic justice.

My turnaround story is about my new place of employment, Boston Market. Boston Market has a storied and colorful history in the restaurant industry. It holds the record of growing faster than any other restaurant chain before it. It grew from 25 stores to almost 1,200 stores in less than six years. It was one of the most talked-about restaurant chains during the early to mid-90s as it rocketed across the country, and onto the tables of American families. It dominated the conversations of competitors, customers and the capital markets.

And then the wheels fell off. The company was required to restate its financial statements to include the losses of its franchise partners. This caused the stock to plummet, and ultimately resulted in the company filing for Chapter 11 bankruptcy protection. Two years later McDonald’s purchased the company out of bankruptcy and owned it for the next seven years. It was originally assumed that they bought it for the real estate, but they saw an opportunity with the brand and tinkered with the rotisserie chicken and hot sides formula. However, they never reinvested in the base business.

In 2007, McDonald’s decided to sell Boston Market to Sun Capital Partners, a private equity firm with almost 80 businesses and several other restaurant concepts. The business they purchased now has approximately 525 locations. I came aboard 4 months ago with marching orders to engineer a turnaround.

Businesses need turnarounds for a variety of reasons. Sometimes they have made a series of missteps that result in the business moving away from its core customers. Other times a business has made no steps, and the marketplace has passed them by. This is what has happened to Boston Market. While it was suffering from the effects of bankruptcy, and then a large owner with bigger fish (or patties) to fry, the world around it changed: fast casual was born.
Fast casual gives the customer the quality of casual dining without the tip, the time, or the price tag. Unfortunately for Boston Market, fast casual operates at a price point similar to its own, but with a better service model. Fast casual typically will bring the food to your table after you have ordered it at the counter and paid.

In addition, grocery stores studied the Boston Market concept intensely and offered their own versions of rotisserie chickens, side dishes, and a host of other items to make a meal from. At their annual conferences, grocery stores even had seminars on how to “Boston Marketize Your Prepared Foods Program.” The world around it had turned hostile.

We are early into our turnaround program at Boston Market. We involved over 100 corporate and field employees, and outside vendors, in an in-depth look at the business and the marketplace around us. We defined for ourselves what success will look like in the future. We have put into motion a series of tests which will tell us if we are on the right path, and if we are, we will roll out these programs across the system.

The odds are against us, but they have been ever since the company embarked on its unprecedented growth program. The company is deep in talent and tenure, and employees at all levels of the organization are pushing the brand upward. The most important part of the early stages of any turnaround is that the people inside the company believe that it can be turned around. From there, everything else is possible.

We will begin with baby steps to rejoin the restaurant world around us, then move quicker and quicker as we pick up momentum, and change becomes part of the culture. Check us out now (we need the business), and then see where we are in a year. I think you will be surprised and delighted at how nimble a 25-year old chain can be when it wants to. And we want to.

{The Leaky Bucket}

This piece of artwork was created by K.K. Muralidharan , specially for Restaurant Marketing Group (a division of ZenMango) for the Leaky Bucket research. Brands of all types use Leaky Bucket research to determine why past customers do not return to the brand.

{Branding, Comparative Warfare, and the Healthcare Debate}

Over the last fifteen years I have helped numerous brands in using comparative ads to win over the consumer. If the decision has been made to directly target a competitor and prove brand superiority, the brand must be prepared to substantiate that claim. If challenged, all internal communication and research must be shared with federal agencies, TV networks, and the target brand; and it is therefore crucial that the research is designed to withstand this kind of critical challenge with pre-tests, national tests, and statistical analysis of results.

As I watch this healthcare debate from the outside, I see both the President Obama led Democratic Blue Brand and the Republican led Red Brand fighting to leave their mark in the people’s mind. Is this any different than two competitive brands fighting it out to tell the consumers that their brand offers the better solution?

Look, for example, at the Chicken wars in which California based El Polo Loco is fighting it out with Louisville, Kentucky based Kentucky Fried Chicken to win over the consumer’s mind for the brand who owns grilled chicken. El Polo Loco is holding true to its core equity, using the flame grilled method of cooking, and being the only brand who offers authentic grilled chicken. KFC, on the other hand, is working hard to build onto its equity of value and solve a perceived problem of the brand, unhealthy (fried only) food. Each brand is playing to its strength and playing hard in doing so.

Similar wars have been fought to own the people’s mind in the following cases:

• Pepsi vs. Coke
• Campbell vs. Progresso
• PC vs. Macintosh
• Gatorade vs. PowerAde
• Starbucks vs. Dunkin’ Donuts
  

In case of the healthcare debate, the battle is drawn on similar lines. The Democrats (Blue Brand) are trying to continue their core equity that won them the presidency and control of both houses, i.e. change and hope. The Republicans (Red Brand) are holding onto their core tactics of warning the people against too much government control.

To decide which brand’s grilled chicken is superior, I can do a taste test for myself and evaluate the claim of both brands. To decide which brand of health care is superior is another matter. The branding of Republicans and Democrats do not give me very much information to evaluate which brand’s claim is more valid for me.

I wonder how the network stations would judge if either of the two brands were challenged for “misleading advertising?”

{Measure Your Way to Success: Secrets of the Super Professionals}

Have you ever seen a serious runner not time his runs?

Football teams measure how long a punt is in the air, because higher air time means defense is more likely to prevent an advance.

Every successful “super professional” I have encountered over the years was simply amazing on knowing the state of their business in real time. These observations have helped me realize three things about measures:

1. What gets measures gets acted upon

Anytime I look at any measure, whether it is my daughter’s school report card, my cholesterol level, or the cash flow of my business, the measure evokes the following questions in my mind:

- STOP: What actions need to be stopped?
- START: What new actions need to be started? What actions need to be improved?
- CONTINUE: What actions need to be celebrated and is worth repeating?

2. We need measures that make action inevitable

There is data, there is information, and then there is information that makes action inevitable. Simple data and information clutter the mind and take away the ability to see the one thing you can do now to influence the future. Here is an example of each of the three types of information:

- DATA: My doctor faxing over my blood report that came from the lab. I read it and say “Hmmm, interesting.” Then I think whether I file it or trash it.

- INFORMATION: My doctor faxes me the same report, highlighting in green the areas I am doing well in, and the areas of concern in red. I got seven greens and three red markings. My reaction again is, “Hmmm, nice!” After I ponder and feel 70% success is not bad, I again go back to my decision: to file or to trash?

- INFORMATION THAT MAKES ACTION INEVITABLE: This time my doctor puts a star on only one thing on the green and red marked report. He puts a brief note saying, “Arjun, this is worrying me. If we do not do anything, you are going to fall in to high risk for a heart attack.” Now my reaction is not “Hmmm,” instead it is “GOSH!” I change my diet and start working out more. Action was inevitable based on the note.

3. Leading indicators are more effective measures than trailing indicators to influence the future.

Most businesses spend hours and days analyzing past performance data to see what worked. Why not use the intelligence to identify leading indicators that will help the business influence sales in future? Here is an example: In my years in the pizza world (Pizza Hut, Papa John’s and others) I realized these simple universal pizza facts:

- The more adverse the weather, the more likely customers will order delivered pizza.
- Based on my past behavior database, I also can identify those customers who usually order pizza when the weather is adverse.

Now armed with these two facts I go to www.weather.com and look at the ten day forecast for my markets. In the markets for which adverse weather is likely, I start taking the following actions to influence high sales:

- Schedule more delivery drivers.

- Ensure drivers to get their cars serviced and checked.

- Direct mail the “bad weather only” customers with a low discount but high value coupon.

- Wait for the adverse weather to arrive and hear the cash register ringing.

Hence, the challenge is to measure, measure, measure, with an eye focused on the action you'll take based on the measure.

{New Marketing Tactics for Chili's and TGIF}

All of us are caught up in the discussion about how bad the current economy is and how we will survive this tough time. Recently, I experienced a practice by two brands who are doing things a “tad” differently to beat these tough times.

First, Chili’s.
Chili’s has a new promotion for two in which you get an appetizer, two entrees, and one dessert for $20. Of course it is a very strong offering, but like all brands, Chili’s also must be facing a reduced media budget. So what does Chili’s do? As I was driving by the Arapahoe and Parker Road intersection (in a Denver Colorado suburb), I saw a man passionately shaking a banner promoting Chili’s new deal. Wow. A brand like Chili’s, who always relied on TV promotions, is now taking their battles to the street corners and trying to drag customers into the parking lot, one car at a time. Simply an amazing adaptation to survive the modern times.

Next, TGIFriday’s.
No one will be surprised to see this offer from TGIF. But when I was recently in a Best Buy store, I saw a promotion to buy select in-store movie titles and included was a buy one entree, get one free coupon valid at TGIF. The titles listed in the promotion include Wanted, The Incredible Hulk, and other family movies. They’re on sale for $12.99 each.

So what are TGIF and Best Buy selling together? A great evening experience for the whole family: eat, have fun, and save a lot. That is bound to make a customer feel good about the brands making life easier for them.

Hence, the challenge is not the lack of resources, but how can we still make customers enjoy a fun moment with limited budget. If you think of similar deals, please let me know as my daughter and I would love to plan a fun father daughter evening with it.

{Does Marketing have a right to overpromise for Operations?}

Many a time when I think about Marperations, I think about Operations not being consistent. My recent experiences with my iPhone made me start thinking, when Marketing over-promises, does Operations even have a chance?

The AT&T dropped call story
Being a single dad and small business owner, most of the time I am on my cell. Lately, AT&T has made that a challenge. When I leave home and get to the intersection of Chambers and Crestline, my calls drop every time. As I drive on, I have discovered six spots within five miles of my home. AT&T has now made my life challenging. I am constantly trying to find new routes or have shorter conversations so that I do not drop a call before I get to the next drop spot.

Now look at these ads. They clearly state more bars and fewer dropped calls. Wake-up AT&T marketing! Why would you pick the one benefit to promote that you cannot deliver on?

McDonald’s Sampling
I think sampling is an age-old, proven method to introduce a new product. But does a brand realize that a promotion like this means Operations needs to have the flexible capacity to meet the demand? There could be one person or one thousand. Operations needs to fulfill every sample order to perfection, as only then will the customer decide favorably to come back and buy from McDonald’s.

JetBlue's Human Touch
Most airline employees other than Southwest employees have forgotten to smile. With the uncertainty of the economy and the airlines constantly coming in and out bankruptcy, I do not blame employees for being stressed. They are performing their tasks with fewer employees (it is called efficiency).
But in that context, when Jet Blue promises the human touch, it raises an eye brow. What were they doing before? Are they going to be any more human now? When my flight is delayed will they listen to me and make a sincere apology and walk me down to the nearest Starbucks at the airport and buy me a tall non-fat chai? No they will not. Then why the promise?

Domino’s / McDonald's Smiles
Domino’s pizza and McDonald’s have been advertising over the last few years that they serve smiles. Yes, it is good to find a pizza delivery driver who is professional and has a smile on his face as he/she delivers my pizza on time. But when was the last time a pizza delivery person smiled at you, unless you tipped him/her generously. Same with McDonald's. When I go through the drive-thru, after I survive the screeching noise made by the speakers, where I have to repeat my order three to four times, and make it to the pick-up window, finding either me or the employee smiling would be liking playing Where's Waldo. There is nothing wrong with a McDonald’s employee, but as they try to be efficient and gather all my food items and take the orders from the cars behind me, do they have an opportunity to pause for me and share a genuine smile?

Best Buy Knows

The Best Buy ads of informed “better than WalMart” employees always fascinated me. Hence this Saturday, I visited a Best Buy to purchase a GPS system for my car. As I entered the store, I realized it was going to be a challenge to find the “men and women in blue”. As I got to the car accessories section, found the GPS systems, and shortlisted my choices to three models, I needed help. I remembered the ads showing me these helpful “men and women in blue” who knew it all. When I finally found and flagged down a Best Buy employee, she looked at the GPS systems for a minute, and then explained to me that she would go get me the “right person”. After a wait, the "right person" came to save the day. He looked sharp and had a smile on. When I told him I needed his help choosing one of the three models, he started reading the information signs below each product. When he was ready, he started by reading aloud the information sign from the first GPS system. As he was reading about “lifetime traffic”, I pointed out to him that the other two also has the same text on their respective info sign. He paused for a second, looked at me, and said, “You are right.” Somehow, this time I was not happy to know that I was right. Finally his advice came down to, “this one looks like it has a bigger screen.” Now that is not what the ad promised. Why would Best Buy marketing advertise its informed team members, when in this down economy they, like every one else, are trying to stay profitable by controlling labor? The false promise goes even further to make Operations' life difficult.

Taco Bell and the Fresh Fruit Fable

This to me is the best example of a “over promise”. I saw the ad and went to Taco Bell for fresh fruit in my smoothie. I have to admit, if they had fresh fruit in any form, I would have been dancing on cloud nine. But instead I saw the team member add a spoonful of liquidy fruit filling to my drink. That was not real fresh fruit, at least to me.

When I look at each of the above examples, I realize the following three things:

1. In each case Marketing has chosen a fantasy message that will really connect with customers without taking into account Operations, who has very little chance of fulfilling the promise.
2. Marketing, in each of the examples, believes in getting customers in the door, but does not take ownership of the disappointment caused by over promising advertising.
3. A true test of marketing would be to identify what they can actually offer, that customers love, that will differentiate the brand.

We all know in the advertising world in U.S., puffery goes unchallenged. I can get away with advertising the world’s best pizza but cannot say that my pizza is better than Pizza Hut’s pizza. But does that still mean that marketing has the right to over-promise? Or does that mean that we consumers have become so smart that we can see through the ads and filter what is true, just as we see through a little child who walks in and tells us that he saw a blue monster in the street.

{Non-Profits: Seven Steps to Maximizing Fundraising}

1. Relevant awareness of non-profit

The target must know all relevant information about the non-profit. Here are some key issues to consider as the non-profit builds awareness:

The information should come to target first hand and not filter through second or third hand audience. That builds a connection.

The communication should be on-going and not one time.

The communication should start and precede any request for funds. Those who are made to feel like "insiders" will contribute more.

RECOMMENDATION:

EVALUATE CURRENT AWARENESS OF THE NON-PROFIT

 

2. Personal/social connectivity

It is very important that each target audience has an answer to the question: "Why is the non-profit important to me and why do I need to step up for the building of the non-profit". Many times when a target audience develops a "soft connection" with a cause they feel the following:

There are "many others" who will donate.

The non-profit will happen with or without my support.

After they take my money, I will not be in the loop any more.

RECOMMENDATION:

BRAINSTORM ON HOW TO BUILD THE CONNECTION

 

3. Replace current recipient of $/smaller contribution amount

It is a common fact that when a new cause is considered by a target, he/she usually starts by thinking "what can I do less, in order to accommodate this cause?" Hence it is very important to break down the contribution element into smaller chunks. E.g. for less than $14 a day, for only one year, you can make a lifetime contribution to the community by being a donor for this non-profit.

Facts like this, instead of a "high threshold of $5,000" will make the target audience think and see what he/she can do to include this cause in his/her choice set.

RECOMMENDATION:

REPOSITION SOME OF THE CONTRIBUTION AS PER DAY OR PER MONTH NUMBERS, INSTEAD OF IN ONE-TIME $.

 

4. Ongoing connection with the non-profit

Ongoing connection, both in the form of involvement and contribution keeps the "habit of participation" alive. This can be accomplished by:

Making contributions in installments

Sending periodic update of progress to the target (and treating him/her as a stakeholder in the non-profit)

Creating a website where the target can check progress anytime he/she wants

RECOMMENDATION:

WEBSITE WITH REGULAR UPDATE

MONTHLY REPORTING ON LOCAL WEBSITES

 

5. Issue/cause reaching out on a personal level (not mass communication)

The non-profit and its office-bearers reaching out personally offer the best chance for contribution. Mass-emails hardly work, unless forwarded by a neutral peer.

RECOMMENDATION:

CONTINUE TO REACH COMMUNITY LEADERS ONE AT A TIME

PENETRATE COMMUNITY LEADERS AND LOCAL BUSINESSES

 

6. Fundraising is full time job

Based on past experience, full time fundraisers are significantly more effective than part-time fundraisers (especially those who are not into sales).

RECOMMENDATION:

HIRE HIGH SCHOOL STUDENTS TO MAKE CALLS

BASE SALARY PLUS BONUS

 

7. The target receives a gift that he/she can display to mark the beginning of a commitment

This initiates a commitment (similar to an engagement ring) that:

Makes the target proud of his/her action

Acts as a reminder to his/her commitment

Helps him share his/her good deed with others in the community

RECOMMENDATION:

WHAT CAN WE GIVE TO DIFFERENT LEVELS OF DONORS?

WEBSITE RECOGNITION

MAGNETS (WITH NON-PROFIT NAME)

{Calling All Pizza Brands: Differentiate!}

In 1988, when I got my first job offer to work for Pizza Hut corporate in Louisville, I was introduced to the complexities of the pizza wars.  It is amazing to see that the members of the Pizza Hut team of 1988 are now at CMO level positions in at least seven major restaurant chains.  Outside marketing, the influence of COO Pat Williamson left a mark in my mind as a visionary who put guest experience first. Pizza Hut, as part of the YUM family, always took pride in being most marketing intelligent. If any brand could out market its competition, Pizza Hut could.

One of my corporate career's last stops was at Papa John's in Louisville, KY where I got to work Papa John's founder of John Schnatter. John's strength is his simplicity and focus on delivering an uncompromised product to customers.  When the guy whose name is on the box is the best pizza maker in the company and is focused on nothing but quality, the brand gets "better ingredients better pizza" rooted in its trenches.

Since starting consulting, I've had the opportunity work with Domino's to assist them with their database and online strategy.  Domino's to me is completely different than the other two pizza brands, as they are focused on delivery first.  In simple layman's terms, if it cannot be delivered efficiently, Domino's doesn't touch it.  No wonder they came up with hot delivery bags and the 30 minute guarantee (which is even used outside the U.S. by Domino's and their key competition).

I've also had the chance to learn from Sarah Grover of California Pizza Kitchen at MEG meetings. Sarah brings an added dimension to the industry as she, along with being a Marketing and Operations visionary, also focuses on harnessing operations to best offer an upscale pizza experience. 

In addition to these big name pizza brands I have consulted with smaller regional pizza chains around the country. With all this diversity of talent, expertise and vision, I expected the pizza category to be quite differentiated when I looked at 2009 Leaky bucket research results.  I was surprised to find out that the pizza category is becoming more undifferentiated.  The big three in the pizza category, led by Pizza Hut, drives the price points for most brands, hence price/value is at par for all brands, which suggests that in the mind of the consumer, no "one" brand has a better price/value proposition than the others. Even though half the category is composed of regional and local players, in the broadest sense, the category seems to be following the big three. Collectively, food and menu are the biggest drivers of non-positive future visit intent. (To review the leaky Bucket information visit http://www.zenmango.com/leakybucket.html.)

As I sit back, I think that if I were king of the pizza category for a moment, this is the direction I would move category to:

1. Pizza Hut:  Continue to focus on great pizza variety at a good value.  If a book is ever written on alternate forms of pizza, Pizza Hut would be in best position to write that.  Bring more new news to the category, Pizza Hut.
   
2. Papa John's:  Go back to the "Better ingredients and better pizza" (BIBP) strategy. I recognize that the BIBP strategy may be a decade old, and the rest of your competitive brands have reduced the gap on better ingredients, but I feel there are considerable rewards to be reaped by going back to BIBP.  Do what you do best, raise the bar Papa John's.  John, if you are listening, America needs to you make our pizzas better.  We are waiting as "Better" is never a destination, it is an ongoing journey.
   
3. Domino's: Stop trying to imitate Pizza Hut and offer new products that do not work.  What was that pizza-pasta combo thing?  Aside from being a great source for a carb-overload, that is not what we need you for.  Go back to being the leader in delivery.  Focus on delivery and be America's Pizza Delivery Company by offering great and speedy value consistently, every time.
   
4. Regional chains:  Try to free yourself from the shadow of the big three. Get to know your local tastes. Own regional events.
   
5. Local pizza places: Offer an experience that the big three cannot offer. Get personal and serve one customer at a time.  Be the "Cheers" of the neighborhood, where you know the name of every customer.
   

{What’s Most Important to Your Guests' Experience?}

What is the one thing a frequent traveler wants from a hotel during a business trip?

Of course a clean hotel, a nice room, a great flat-screen TV, a shower with amazing water pressure and other things. But all this is of no avail if one cannot have a good night's sleep. Some of us like me are fortunate that we can fall asleep anywhere anytime. Unfortunately, that is not the case for most frequent travelers.

Research International conducted an online study among 1,000 overnight and international business travelers who took at least 2 trips in the past year. 25 percent of travelers said they have fallen asleep in a meeting due to sleep deprivation, 70 percent felt less productive after traveling, and close to 20 percent had a presentation go badly or lost business as a result of poor sleep due to traveling.

So what can a hotel do? How far should they go?

In a recent trip to the DC area, I stayed at the Lorien Hotel and Spa in Alexandria, VA. As my teen marketing team and I walked into the hotel, I realized this would be a "different experience"; but was not sure if that will be different good or different bad. As I was checking in, we saw a living area on the right with tons of books, all in white covers. More strange stuff I guess.

The rooms were nice, the beds were comfortable. There was a fresh and clean aura in the room. But what I saw next completely startled me. Next to my bed, on the bedside table, was a brochure called "Sweet Dreams Made Easy". Inside the hotel had three pages of stuff, mostly free, to make sure that I had a good night's sleep. They offered pillows of every kind that ranged from snore-no-more pillows, a body pillow, a neck pillow, a bed wedge, water pillow, magnetic pillows to contour pillows. To unwind, they offered lullaby library songs, ear buds, sleep masks, bedtime stories, a soothing sound machine, diffusers or a humidifier. Of course if I was a tad hungry, they would bring milk and cookies for me for a moderate charge. And if all this fails, for $20, I could get my own teddy bear.

Wow!

I thought for a second and felt WOW (again). I had previously resigned to the fact that there could be no "really new" wow ideas in a hotel. Hotels to me have become transactional experience providers, but this was a case where a hotel really knew the most important thing I needed and went all out to make sure I got a good night's sleep. This is the perfect inspiration behind a WOW guest experience.

{Bad Image for Marketing & Operations: Cold Cappuccinos and Lonely Waitresses}

Many times when I write about Marperations™, Operations gets the bad guy image, something which is trying to come in with measures to be more efficient and hence makes the guest experience more blah. The following incident is slightly different as Marketing set a tone which put Operations in a no-win situation.
June 16, Westminster, Colorado
A few of us just came out of a presentation at the Madcap Theater. There were eleven of us. It was 8:30 p.m. We looked around and there was a plethora of choices: Rock Bottom, Tuk Tuk Thai Bistro, Jackson's All American Sports Grill, Dave & Busters, Que Bueno Mexican Grille, Anthony's Pizza & Pasta, BJ's Restaurant & Brewery, Bonefish Grill, Buffalo Wild Wings, and Hacienda Colorado. We walked into Johnny Carino's. I felt it was a great place for us to celebrate. I also felt with the state of the economy as it stands, any restaurant would welcome eleven of us on a Tuesday night with a big grin.

The décor was nice. It looked clean, proper, and inviting, but it was nearly empty. There were three or four other tables occupied in this amazing restaurant. We were seated and soon were busy in talking about the war we had just won. The "lonely waitress" came in and took our beverage order. Six of us ordered the cappuccino. When the beverages came in, they were lukewarm. Some on our team felt that the temperature was unacceptable. A guy who looked like the manager came to the table. He would not believe that the cappuccino was not hot enough. He asked all of us repeatedly. In disbelief he went back and returned with a fresh set of cappuccinos. This time it was barely warm. I was too tired to fight. As the manager kept insisting that we make sure that it was right this time, the same two in the group stated "No, it is still not right." The manager was in disbelief. He was ready for war. He came back with two steaming cups of cappuccino. We were all tired of trying cappuccino at different temperatures, but the manager strongly, even aggressively insisted. Yes it was finally right.

The rest of the evening the service was at that same "level". The "lonely waitress" was acting out. There were no smiles. Smiles were replaced by shrugs and eye-rolling. But we were happy to have a place to sit and eat. The food was nice, other than the fried calamari which was served "chilled".

As I sat there, I was upset at the service, but I reasoned with myself. I realized that the "nearly aggressive manager" and "lonely waitress" were humans. They were tired of carrying the load alone. Marketing must have decided that even if economy is down we should keep the store open till regular hours. Closing early on weekdays may send a wrong signal to stakeholders that we are hurting. Instead let us keep doing what we are doing, but now, let us operate the store with skeletal minimal staff.

When you do that you stretch operations to a point of no recovery. To me it is simply not fair. When a group of eleven show up and are having a "jolly good time" and have no urgency to place their orders, it is tough on the "lonely waitress". She must have been the lowest in seniority and hence got this shift. What does she do when six people complain that the cappuccino is too cold? I am trying to find excuses for the "nearly aggressive manager" but I cannot think of too many reasons why he got that defensive and aggressive. I guess stress shows up differently in different people.

So my suggestion to marketing is "Be Real." Please do not try to be true to the brand by making promises that operations cannot keep. It is ok to say that we will close restaurants early on weekdays so that every moment we are open, we will open with passion and vigor. Now that is a promise every customer likes, and employees, too, will cheer the resulting reduction in late hours. A win-win Marperations strategy for the customer and for the brand.

{Guest Experience: The Childrens Hospital Check-in}

Recently, my daughter was not feeling well. It was a Friday afternoon, after 4PM. Most readers who are parents will agree with me that health problems with our children mainly happen either after hours or on weekends.

So like any dad would do, I took her to The Children’s Hospital. In Denver they have a new location on the Fitzsimmons campus. We parked outside and marveled at the amazing new building as we approached the entrance. When we walked in, the first thing about the state-of-the-art hospital that struck me was their amazing security system. Before I could take my daughter to the lobby and meet a nurse, I had to go to the security desk and give them my driver’s license to create an ID badge for me.

In an effort to get through the process, I complied. But their ID printer was not working; my picture ID got printed as a black blob. I know I am not terribly good looking, but still, that was not right. However, I was fine living with the black blob badge for a few hours as I wanted to make sure my daughter got medical assistance sooner rather than later. But the security personnel were adamant on getting it right. What followed was a crazy episode of security people trying to act like IT professionals. Maybe they thought they could do it as their title “Security” includes the letters “IT”. It never worked, so finally I was allowed to go in with a black blob ID.

When we approached the patient registration desk, the first question the lady at the desk asked was, “Can I get your proof of insurance please?” Then I had to sit there, waiting for this insurance card verifier lady to take her time making copies of my insurance card and doing all sorts of verifications. Finally she came back and wanted me to make sure all information was correct and updated. I said a patient yet determined “Yeeeeees!”

After 30 minutes of security and insurance verification, I was finally in line waiting to see a nurse who would then decide if my daughter would get to see a doctor. I totally understand the operations philosophy of minimizing costs and serving a customer with the minimum salaried employee, but is that also the vision that marketing has? Is that the vision I, as a customer, had when I took my daughter to the hospital? I did not go in to get served in the most efficient way! I went in to be served with reassurance, immediately.

{Do you feel special? A closer look at loyalty cards}

During my days in working in the Pizza Industry (I started my career at Pizza Hut and eventually was the VP of Marketing & Operations Services at Papa John’s), one thing always baffled me. Why did the pizza category have the highest deal rate among any restaurant category? (A deal rate simply means what percentage of customers felt that they buy the pizza at a price lower than the menu price.)

In order to understand why the pizza category had become so deal/discount oriented, I developed the following hypothesis:

1.             For a customer, brand switching is very easy when ordering a pizza. To switch, a customer simply has to dial a different set of 10 numbers when ordering over the phone, or go to a different website for online ordering. That’s all it takes to switch brands!

2.             Consumers are always looking for who has the best deal or value offering, that day. As brand switching is so effortless, the brand offering the best value on a given day has the best chance of getting a customer to switch to the brand.

Brands feed this "consumer addiction to value" by providing ongoing value offerings and discounts like this:

30% off Pizza Loyalty Card

One specific practice caught my attention. It was a common practice to reward a frequent user with discounts. That simply means if you order 10 large pizzas on a calendar year, you get a special card that allows you to buy pizzas from the company for a 30% discount. When I performed some detailed focus groups with consumers, I learned the following:

1.       Consumers are okay with buying the pizza at its regular price. (Did the consumer not prove this by buying pizzas at regular price 10 times?)

2.       Getting the lower price made the customer realize that they were getting hosed by paying more than the fair price for the first 10 pizzas. (Whoa! What a way to start a relationship!)

3.       Giving the consumer a 30% discount for all future pizzas that year was deep discounting.  

But did the consumer want the 30% off Pizza Loyalty Card?

It is amazing how one gets the answer to every question when they talk to the customer. Of course asking the right question is very important.

When I was moderating the focus groups I asked the customers if the 30% off pizza loyalty card would get them to come back to the pizza place over and over. The customers looked perplexed.  “Did we not prove to you that we have been to your restaurant to buy at the regular price more than ten times?” Good point, I thought. Then I asked, “So what do you want?” 

It took the customers just a second to say, “Every time I order, put my pizza in the oven first, before everyone else’s.” 

I asked myself, was the customer talking about a first class experience on a plane?

“Remember my favorite order and deliver it without any mistakes.”

“Give me something more that I did not order, e.g. breadsticks or cheesesticks. Or even some extra dipping sauce.”

“Remember my name. When I call, your phone should ring with a different ring tone.”

So what did the customer really want?

As we cleaned the focus group room and sat down to de-brief, it dawned on me that the customer wanted to be treated special.

Years later, I was revisiting the humbling learning experience from the focus groups. Then I got it. On a given day the customer buys just pizza one time, and we, in the store sell to hundreds of customers on any given day. The customer wants to feel that we are only making their pizza. Instead, they get an efficient, process-oriented response, in which everything is mechanical. There is no personal touch.  That is where things break down.

This is what resulted in the birth of Marperations™.  Marperations™ is a place where we put the customer first.  There is no operations or marketing team in Marperations™. Instead everything is focused on guest experience and meeting the guest’s expectations. For a minute, forget the efficiency mantra of operations, forget the branding preaching from marketing; instead, be present with the customer and smile and ask… “What can I do for you?”

Marperations™ is built on five universal truths:

1. Every customer interaction - which is usually in the exclusive domain of operations - is actually marketing to a significant extent.

2. Every advertising campaign - which is usually in the exclusive domain of marketing - sets the expectation that governs every sale and is therefore in the operations realm.
3. Linking marketing and operations is critical to presenting one unified message to the customer. This occurs from the start of the marketing communication to the actual sale of the product or service.
4. The better a company's operations run, the easier it is to market its product or service.
5. The better a company's marketing runs, the easier it is to perform the business of operations.